Cost-Effectiveness Methodology

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How J-PAL calculates cost-effectiveness

The cost-effectiveness analysis presented on J-PAL’s website shows the impact against a specific policy goal that can be achieved for a given expenditure (e.g. additional years of education per $100 spent). All the impact estimates are based on the evidence from rigorous randomized evaluations. A number of judgment calls have to be made about how to measure costs and benefits. In most cases there is no single “right” answer—different approaches are appropriate in different contexts (for example which exchange rate or discount rate to use will depend on whether it is an international donor or developing country government that is making the decision about what to invest in).

The full details of J-PAL's cost-effectiveness methodology are included in the 2013 paper "Comparative Cost-Effectiveness Analysis to Inform Policy in Developing Countries." For more details, including the calculations underlying the analyses, please email Kyle Murphy.